Investors plow billions into stocks, bonds and EM assets as risk appetite returns

LONDON (Reuters) – Global investors plowed money back into stocks and bonds this week as they regained their appetite for risk, boosted by dovish comments from Federal Reserve Chair Jerome Powell.

International equity funds drew inflows of $6.2 billion while $7.2 billion flowed into bond funds, BAML strategists said on Friday, citing data from EPFR tracking flows in the week to Jan. 9.

Emerging market assets were popular with both equity and bond funds drawing in $2.4 billion, while high-yield bond funds received $1.5 billion inflows.

Investors pulled $600 million from tech stocks and $1.5 billion from financials stocks, also dumping $1.4 billion of investment-grade bonds.

BAML’s gauge of investor positioning fell to 1.8, what the strategists called “extreme bear territory” last week, triggering a “buy” signal for equities.

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